I played the Baldurs Gate games where there is a numerical experience points score, for which they had set a "cap" - ie a maximum achievable level. But Morrowind is very different of course...

You can only go up a level when 10 increases of a major/minor skill are achieved. And skills can be increased to 100 and no more. So there IS a level cap, because when all your major and minor skills are at 100 each there is no opportunity to go any higher.

This means the starting levels of your major/minor skills dictate the levels that can be achieved. And they seem to vary from character to character due to class/race.

Hmmm. Maybe a contrary viewpoint helps. Try starting characters where the racial bonuses do NOT raise the major/minor skills (I have a Breton Agent for instance; how about an Orc Sorceror anyone?) lead eventually to the highest possible levels.HTH

You can also level up (I believe) by getting caught doing a crime and going to jail. Your skills decrease, but I don't believe your attributes do. That means you can then re-learn your skills, and use taht to level up.